Stalled development in commodities temporary?

Published: 10 April, 2012 14:33

Gold investmentCommodity prices have recently gone up widely, which has lead to that those who invested in the sector, not have been able to see their investments increase in value. But the last few days, oil prices as well as gold and copper have had its ups and downs. It is said to depend on if the oilstock in the U.S. and Europe reduces, but could also depend on the stable dollar.

Oil

The increasing oil price has been hampered in recent times. It has even declined slightly recently. The reason is said to be that the U.S. is considering to review its oil stocks, and maybe even release a part of this oil to the market, as well as the UK and France. It is in this case, a deliberate strategy by countries to throttle the rising price for oil, which the industries are so dependent of. Having said that, the relationship between Iran and the rest of the world, is balancing on a scale. Iran is one of the world’s largest oil producers and one of the rulers of the all-important oil route. Previous negotiations have broken down, but now it’s time for new actions. On April 14th, representatives from China, Russia, USA, UK, Germany and France is to meet up with Iranian officials for a hearing. What this will give will of course be anybody’s guess. However, it is clear that the results of this meeting will affect oil prices in general.

Metals

Metal prices seem to have peaked and is now falling. The stable dollar could be seen as one of the reasons. While the growth rate reduces, the demand for metals from China increases, which calms the market. If this is a trend that will continue, it will show in the near future.

Analyses of the future

The investment bank Goldman Sachs notes that the peaks in the price curve has probably been reached. At least in the short term. This alters the statement about how prices will be in the commodity business. The anxiety that previously pushed prices has slowed down, in comparison to other financial markets. It mainly depends on that sales of commodity trade has decreased drastically. The investments that could pay off in the short run involves investments, in particularly, gold and oil, two commodities which, according to Goldman Sachs will rise steadily in price.
However, Goldman Sachs also believes that the commodity market is a good investment in a longterm perspective. This is the bank with an estimated price increase of an average by 10%.

Commodity trading

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